REG - Comptoir Group PLC - Trading Update and Board Changes

ComptoirAnnouncement

14/01/2025 07:00

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RNS Number : 1554T  Comptoir Group PLC  14 January 2025

 

Comptoir Group Plc

 

("Comptoir", the "Group" or the "Company")

 

Trading Update for the Year Ended 29 Dec 2024

 

Board Changes

 

Comptoir Group Plc (AIM: COM), the owner and operator of Lebanese, Middle
Eastern and North African inspired restaurants is pleased to announce a
Trading Update for the financial year ending 29 December 2024 to date ("FY24"
or the "Period").

 

Financial Highlights

 * Group revenue for FY24 of c.£34.5m, an increase of 9.5% on the same period
last year (FY23: £31.5m)*

 * FY24 trading vs FY23 has shown a positive increase in restaurant sales - with
like for like sales in the second half year of +2.9% and full year like for
like sales of +1.9%

 * The Group had its most successful Christmas trading period to date as a result
of the investment in people, systems, food quality and service providing its
guests with great value and a differentiated experience.

 * Total sales for the seasonal six-week trading period ending 5 January 2025
were £4.6m, a growth of 19% for the same period last year, including
like-for-like sales increasing by 8.4%.

 * The full year Adjusted EBITDA is expected to be in excess of £0.5m, rising
from a loss of £0.6m for the half year.

 * The Group held an (unaudited) net cash and cash equivalents position of £5.9m
(H1 2024: £4.9m) at year-end. The Group has a residual balance of £1.0m (H1
2024 £1.3m) on its CBIL loan of which is expected to be fully paid back by
September 2026

 

* The financial expectations noted above are preliminary, and subject to
year-end financial close and audit review processes.

 

** Adjusted EBITDA was calculated from the pre-IFRS 16 loss after taxation
adding back interest, tax, depreciation, share-based payments, and other
non-cash and non-recurring costs.

 

CEO Trading Statement

 

"2024 has not been without its challenges as the general economic climate and
sector specific cost pressures continue to bear down on the Group. Despite
this backdrop, the senior management team has delivered a year of both sales
and profit growth.

 

The performance in the second half of the year was particularly pleasing, with
an increasing cash balance and a strong Christmas trading due to a concerted
effort by the team to elevate the guest experience. Furthermore, we have
continued to invest in refurbishments, technology, sustainability and
especially our people, where we have industry leading team engagement. These
investments, which have now concluded, together with our new managed and
franchised restaurants are building a solid foundation for the Group.

 

We are reviewing our cost base and efficiencies and we continue to address
underperforming restaurants and will take appropriate action with these where
required. We have every confidence that the progress on like for like sales
growth and profitability will continue in 2025 and that the Company is well
positioned as it enters the new year after a period of strategic investment.

 

I would like to thank my Senior Leadership Team and everyone in Comptoir Group
for their efforts in 2024."

 

FY24 Autumn Budget - National Insurance Contribution and National Minimum Wage
mitigation

 

We estimate the impact of the recently announced increase in National Minimum
Wage (NMW) and the changes to Employers National Insurance Contribution (NIC)
to be around 10% of total labour costs, being £800k in FY25 and approximately
£1.1m on an annualised basis. Given the general economic background of
continuing high interest rates and other ongoing cost pressures this increase
in labour cost puts pressure on all businesses in the sector to further
increase pricing. We believe that we can achieve some labour cost savings
through our excellent skilled teams and maintaining our high team retention
rates together with the tactical use of technology. This, alongside modest
price increases and a rigorous focus on costs, means we are confident that the
Group will continue to deliver in 2025 despite these additional headwinds.

 

Chairman's Statement

 

I am pleased to announce some significant progress in the past six months.

Despite a challenging market, we have demonstrated resilience with revenue
growth increasing from 0.9% LFL at the half year to 1.9% LFL at the full year.
This success is attributed to our team's dedication, their hard work and our
strategic focus on:

 * Elevating the customer experience: Investing in our people to deliver
exceptional service.

 * Driving innovation: Introducing new and exciting menu items whilst maintaining
authenticity and staying true to the Middle Eastern classics.

 * Expanding our reach: Refreshing our restaurants and expanding our network.

 

These strategic investments, coupled with careful cost management, have
strengthened our foundation and positioned us for future growth. While we
remain optimistic about the long-term prospects of our unique,
family-friendly, healthy, dining experience, we will continue to address
underperforming restaurants and will take the appropriate action with these as
needed, as well as our cost base overall.

We will therefore continue to solidify our business to accelerate our
improvements and ensure we have the right platform in place before we can
accelerate our growth.

With a strong cash balance of £6.0m we're well-equipped to navigate the
challenges ahead.

Changes of Directors

The Group announces that Nick Ayerst, CEO, has informed the Board of his
intention to step down to pursue an exciting career opportunity and has
therefore tendered his resignation. It has been agreed that he will remain in
his role as CEO until the end of February 2025 to ensure an orderly handover
before departing.

Tony Kitous, Founder and Creative Director of Comptoir, has identified Chaker
Hanna, the former CEO of the Group, that stepped down in August 2022, as an
appropriate successor to replace Mr Ayerst. Mr Hanna has extensive industry
experience and has remained a substantial shareholder of the Group and retains
an 18% holding in the Company. The formal appointment of Mr. Hanna is subject
to the completion of standard regulatory checks.

In light of the decision to seek to re-appoint Mr Hanna as CEO, meaning that
the Company's executive team and Board will now control c. 66% of the issued
share capital, Ali Aneizi  (Independent Non-Executive Director) and
Jean-Michel Orieux (Independent Non-Executive Chairman) feel that they are no
longer able to advise the Board going forward or continue in their roles
representing all the shareholders of the Company effectively and
independently. As a result, the Company announces that Mr Aneizi and Mr Orieux
have jointly resolved to step down from the Board with their resignation
becoming effective at the end of their three month notice periods commencing
on the date of this announcement. They have both agreed to remain in their
respective roles until appropriate successors have been identified and
appointed in order to facilitate a seamless and smooth transition.

The Company has commenced a search for their replacements and is in advanced
discussions with Richard Kleiner, the Company's former Chairman that stepped
down in August 2022, who has, in principle, agreed to serve as Chairman of the
Group going forward. In addition, the Company is seeking to identify and
appoint an independent Non-Executive Director to replace Mr Aneizi.

James Fisher, FD and Tony Kitous, Founder and Creative Director will remain in
their respective roles.

Further announcements will be made once the regulatory checks have been
completed in accordance with the AIM Rules for Companies when Mr Hanna and Mr
Kleiner are expected to officially be appointed to the Board.

Jean-Michel Orieux, Chairman of Comptoir said:

"We would like to thank Nick for the expertise and impact that he has brought
to our Board and the Group as a whole. He has been instrumental in guiding the
team and wider workforce through a successful cultural and business
transformation. He leaves the business in a strong position and we wish him
the very best in his new role and the next chapter of his career."

Tony Kitous, Founder and Creative Director of Comptoir said:

"On behalf of the Group, I would like to thank Jean-Michel and Ali for their
support and guidance during their respective tenures. Their sector knowledge
and expertise has been invaluable and I am personally grateful for the
contribution they have made and the part they have played in the
transformation of the Group. As a result, the business is well placed to
tackle the challenges and opportunities ahead and we all wish them the very
best for the future."

2024 Opening and Closures

 * Comptoir Libanais Southbank opened in April 2024, one of the highest profile
sites in the Group's estate

 * Comptoir Libanais Cheshire Oaks was brought back into the managed portfolio
from their franchisee partner Avolta in March 2024. This transaction attracted
a four year rent contribution of £1.0m from Avolta to the Company as part of
the deal structure which was settled upfront and led to a contribution to the
cash position during the year

 * In March 2024, Shawa, a shawarma-led fast casual restaurant, opened in Abu
Dhabi's Zayad International Airport with our franchise partners Avolta

 * Comptoir Libanais Milan Malpensa Italy opened with our new partner Areas Italy
in June 2024

 * Yalla Yalla Soho and Comptoir Libanais Ashford, an Avolta operated franchise
restaurant, both closed during the year in February and July respectively

 * At year-end, the Group owned and operated 22 owned restaurants, with a further
six franchisee restaurants across 3 partners. All new openings are trading as
per management's expectations

 

Post period event

 * Subsequent to the year end the Group has taken the decision not to renew the
lease of Kenza Restaurant and Bar and will continue to monitor the financial
performance and contribution of all sites in the portfolio

 

Enquiries

 

 Comptoir Group plc                       0207 486 1111
 Nick Ayerst, CEO
 Jean-Michel Orieux, Non-Executive Chair

 Cavendish Capital Markets Limited (Nominated Adviser and Broker)
                             020 7220 0500
 Corporate Finance: Carl Holmes/Elysia Bough
 Corporate Broking: Charlie Combe

About Comptoir Group PLC

Comptoir Group PLC owns and operates 28 Lebanese, Middle East and North
African inspired restaurants, six of which are franchised, based predominately
in the UK. The flagship brand of the group, Comptoir Libanais, is a collection
of 22 restaurants located across London, nationwide and international Travel
Hubs, including cities such as Manchester, Bath, Birmingham, Oxford, Dubai and
Milan.

The name Comptoir Libanais means Lebanese Counter and is a place where guests
can eat casually and enjoy Lebanese, Middle Eastern and North African food,
served with warm and friendly hospitality and a bright vibrant environment.

The Group also operates Shawa, serving traditional shawarma through a counter
service model in Westfield and Bluewater shopping centres and Abu Dhabi and
Yalla-Yalla with a branch near Oxford Circus.

The group has expanded internationally with its franchise partners Avolta and
Areas, with restaurants in the Netherlands, Qatar and UAE and Italy.

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